The goal of "Nonprofit Conversation" is to provide a forum for discussion of nonprofit success and challenges. Bunnie Riedel (host) provides advice, observations and solutions for the nonprofit community. Guest bloggers will be invited to share their ideas and interviews will be conducted with nonprofit executives, board members and other experts in an effort to create a "conversation."

Sunday, July 11, 2010

The folks at Charity Navigator do incredible and important work by evaluating the stewardship of donor dollars. Every nonprofit should follow their guidelines for what information to provide the public regarding the organization's management, structure, income, expenditures, etc. Getting a good rating from Charity Navigator is important because it will assure your donors that you are responsibly and ethically using their money for good. Bunnie

Donors will be in a better position to make informed giving choices now that Charity Navigator, America’s largest and most utilized charity evaluator, has expanded its analysis.

Since launching its service in 2002, Charity Navigator’s free financial evaluations --- which examine how a charity functions day to day and how well positioned it is to sustain its programs over time --- have changed the giving habits of the general public. But financial metrics are just the starting point in choosing a charity to support. Donors must also have access to information that considers a charity’s accountability and transparency practices and assesses its effectiveness and results. Starting this month, Charity Navigator is deepening its analysis by rolling out new metrics that examine the accountability and transparency component.

“Smart donors should require evidence of accountability and transparency from the charities they support,” said Ken Berger, President & CEO of Charity Navigator. “They should require this evidence because charities that are open about their performance and follow best practices in areas such as governance and donor privacy are less likely to engage in unethical or irresponsible activities and, as a result donations to such charities are a less risky investment.

“Charity Navigator was created with the goal of advancing a more responsive philanthropic marketplace, in which donors and the charities they support work in tandem to overcome our nation's most persistent challenges. We are thrilled to go beyond our financial ratings and take our analysis to the next level. By reviewing each charity’s commitment to accountability and transparency, we can help donors make even smarter giving choices.”

When examining the accountability and transparency of charities, Charity Navigator’s new methodology seeks to answer the following questions:

Does the charity follow ethical and best practices?

Does the charity make it easy for donors to find critical information about the organization?

Specifically, the methodology, which was developed in partnership with Charity Navigator’s staff, Board, Advisory Panel (http://www.charitynavigator.org/advisory), donors and nonprofit leaders, tracks the following:

1) A review of the charity’s website to determine if

Board members listed

Key staff listed

Audited financials and Form 990 included

Privacy policy posted

Inclusion of information about effectiveness and results

2) A review of the newly expanded Form 990 to determine if

The charity has made loan(s) to related parties

There has been a material diversion of assets

There are minutes for Board meetings

Copies of the Form 990 were provided to organization’s governing body

The charity has a conflict of interest policy

The charity has a whistleblower policy

The charity has a records retention policy

The charity disclosed its CEO’s name and salary

The charity has a process for determining CEO compensation

The Board is paid

The audited financials were prepared by independent accountant

An audit committee exists

As soon as the accountability and transparency data is gathered on a particular charity, it will be posted on its ratings page. However, no charity’s rating will be impacted by the results of this richer analysis until the data has been collected for all 5,500 charities in Charity Navigator’s database. For more information about Charity Navigator’s new Accountability / Transparency Methodology, please visit: www.charitynavigator.org/accountability. And to see a sample of a charity that has been reviewed for its accountability / transparency data, please visit: www.charitynavigator.org/accountability/list (more charities will display this data in August).

About Charity Navigator (http://www.charitynavigator.org/)

Charity Navigator is the largest charity evaluator in America and its website attracts more visitors than all other charity rating groups combined. The organization helps guide intelligent giving by evaluating the financial health of over 5,500 charities. Charity Navigator is a 501 (c)(3) organization which accepts no advertising or donations from the organizations it evaluates, ensuring unbiased evaluations. Charity Navigator, can be reached directly by telephone at (201) 818-1288, or by mail at 139 Harristown Road, Suite 201, Glen Rock, N.J., 07452.

1 comment:

It’s a great feeling to be a part of a social cause! Connect to Charity is supporting more than 1.8M nonprofits by spreading the word amongst potential donors by creating online fundraising pages, reviews and Facebook Aps for promotion. Nonprofits are trying very hard to "get the word out about what they do for others", while growing their organization for long-term success. At Connect To Charity, their objective is to help nonprofits overcome these challenges.